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Latest update : 2012-08-21

Iraqi Kurdistan: the downside to a success story

The semi-autonomous region of Iraqi Kurdistan is held up as an example of stability and development in the Middle East, in large part thanks to its oil revenues. But the gap is increasing between a minority that is thriving, and those who are not reaping the benefits from this economic boom...

Under a baking sun, an immaculate white luxury car is parked in front of an architect’s home. Decorated with grey marble, the 600m² building is on sale for 1.125 million euros. We are in Iraq - but in Erbil, the capital of the semi-autonomous region of Iraqi Kurdistan.

Rasul, an estate agent for what is known as the "Italian Village", speaks in a conspiratorial tone. “We have very rich men in Kurdistan, they have millions!”

Iraqi Kurdistan has 19 billionaires, to be precise.

The region is enjoying an economic boom unique to the Middle East, thanks to security, oil revenues and financial incentives for investors. Around 2,000 foreign companies including Total, Exxon Mobile, and have now set up bases in the region.

However Himdad, a 26-year-old philosophy student, is not so happy about this Kurdish success story. Walking around the upmarket district nicknamed Dollarawa - “dollar-owned” - Himbad is disheartened. “The prices here are so high that only officials and rich people can afford it. Poor people really don't have the means”, he explains.

Himdad earns 400 dollars a month working as a night security guard, which is the average salary for a civil servant in the region. Like them, he cannot afford the new luxury flats nor the European products sold in the French-style department stores. Himdad lives in a small hut that he has built on the roof of the room he shares with five other members of his family.

Young Kurds - who make up over half the population - are highly critical of Iraqi Kurdistan society. “The old generation do not realise that the world is changing. They are trying to keep the old habits and traditions. But we want change,” Himdad tell us.

In a region where growth was estimated at 8% last year, the majority have yet to see any real benefits. Those benefiting are reportedly a minority close to the elite. “There is money coming in from oil revenues. The political groups have it. And they distribute it according to proximity, friendship, nepotism, sibling relationships”, explains Hosham Dawood, an anthropologist based in Erbil.

Kurdish society is now seeing the two systems collide. That of the Peshmerga leaders is based on unconditional loyalty to a clan. Meanwhile, the younger generation aspires to a more equal distribution of the region’s newfound wealth.

It’s a potentially explosive mix in a region which controls one fifth of Iraq’s oil supplies.

By Claire Billet

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